The 4-steps of financial planning and how to get started

The holidays are over; the kids are back at school; and for some, the convincing promises and undertaking we made on New Year’s Eve - to take control of our finances, is a distant memory as we fall back into the routine of life and daily living.

But what if we told you that starting a financial plan doesn’t need to be overwhelming and that we can help you get started with 4 simple steps?

Step one: The first step in financial planning is to identify your goals. This could be paying off your credit card debt or saving up a deposit for a new car, a home, or a holiday. It could be ensuring money is put away for your child’s education or for the retirement of your dreams. Is it making sure that your loved ones are taken care of if anything happens to you? Or is it ensuring that can give your family a dignified funeral?

Are your goals short-term or long-term?

• Short-term goals are things you want to accomplish soon, usually within the next 5 years.
• Long-term goals require time and planning. They aren’t something you can complete this month or even this year. Long-term goals usually take more than 5 years to achieve.

Once you know what you’re planning for, you can then determine what steps you need to take to help you achieve your goals.

Whatever your goals, make sure they are clear and specific. You can even give them names. Doing this could help you to be more motivated to achieve them.

Step 2: Build and develop a financial plan to help you achieve your goals. Now that you know what you’re planning for, you can determine

• How much time you’ll need to accomplish your goals - is it a five, 10 or 20-year plan?
• Do you need to put cash away into a savings plan, a funeral plan, a retirement plan or a life cover plan?

Metropolitan has a range of products to help you meet your needs and life goals. You can save yourself hours of frustration by getting a qualified Metropolitan financial adviser to help you prioritise your most important goals and then help you create your financial plan.

Step 3: Put your plan into action. This sounds easy; however, it takes discipline to get started. You may need to adjust your spending habits and start budgeting your cash-flow so that you can afford your monthly premiums.  Consider paying your premiums via an automatic bank debit order, doing this will give you one less thing to remember to do

Step 4: Review your financial plan and adjust where necessary. Your financial plan is not set in stone, you should make a habit to your review your financial plan as you reach life’s various milestones or if your needs and circumstances change, and check that you are on track to achieve your financial goals.

No matter your circumstances, there is no better time to start your financial plan than now. Remember, you don’t have to overextend yourself. Start with what you can afford and adjust your plan as your income and budget improves. Speak to a Metropolitan financial adviser who can help you navigate this journey and do the work for you.

Together we can